| REGISTERED NUMBER: |
| Financial Statements |
| for the Year Ended 31 December 2024 |
| for |
| Headline Pictures Limited |
| REGISTERED NUMBER: |
| Financial Statements |
| for the Year Ended 31 December 2024 |
| for |
| Headline Pictures Limited |
| Headline Pictures Limited (Registered number: 03090303) |
| Contents of the Financial Statements |
| for the Year Ended 31 December 2024 |
| Page |
| Company Information | 1 |
| Balance Sheet | 2 |
| Notes to the Financial Statements | 3 |
| Headline Pictures Limited |
| Company Information |
| for the Year Ended 31 December 2024 |
| DIRECTORS: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Statutory Auditors |
| Chartered Accountants |
| Reedham House |
| 31 King Street West |
| Manchester |
| M3 2PJ |
| Headline Pictures Limited (Registered number: 03090303) |
| Balance Sheet |
| 31 December 2024 |
| 2024 | 2023 |
| Notes | £ | £ |
| FIXED ASSETS |
| Intangible assets | 4 |
| Tangible assets | 5 |
| Investments | 6 |
| CURRENT ASSETS |
| Stocks | 7 |
| Debtors | 8 |
| Cash at bank and in hand |
| CREDITORS |
| Amounts falling due within one year | 9 | ( |
) | ( |
) |
| NET CURRENT (LIABILITIES)/ASSETS | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
| CREDITORS |
| Amounts falling due after more than one year | 10 | ( |
) | ( |
) |
| NET LIABILITIES | ( |
) | ( |
) |
| CAPITAL AND RESERVES |
| Called up share capital |
| Share premium |
| Retained earnings | ( |
) | ( |
) |
| SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements |
| for the Year Ended 31 December 2024 |
| 1. | STATUTORY INFORMATION |
| Headline Pictures Limited is a |
| 2. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| Related party exemption |
| The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
| Turnover |
| Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
| Intangible assets |
| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less |
| any accumulated amortisation and any accumulated impairment losses. |
| Computer software is being amortised evenly over its estimated useful life of four & five years. |
| Tangible fixed assets |
| Computer equipment | - |
| Tangible fixed assets are recorded at cost less accumulated depreciation and accumulated impairment losses. |
| Investments in subsidiaries |
| Investments in subsidiary undertakings are recognised at cost. |
| Stocks |
| Development expenditure is valued at the lower of cost and net realisable value. |
| Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2024 |
| 2. | ACCOUNTING POLICIES - continued |
| Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
| Foreign currencies |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
| Pension costs and other post-retirement benefits |
| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
| Going concern |
| The drama sector is currently experiencing a post-"Peak TV" contraction, with overall commissioning volumes reduced by approximately 45%. Declining advertising revenues from linear broadcasting platforms have resulted in substantial cuts to commissioning budgets. At the same time, major streaming platforms such as Netflix have significantly reduced commissioning activity and tightened production budgets. These pressures have been further compounded by global production delays caused by strikes in the United States and an anticipated post-electoral uncertainty. |
| In addition to these market conditions, Headline Pictures has faced company-specific setbacks that began in 2023 and continued to reverberate throughout 2024. The company was required to restructure further during the year, including the departure of the Head of Development and Development Coordinator, as well as the non-renewal of Simon Hailey's services. Moreover, the administration of Headline's co-producer Bron has prevented the commissioning of a third and fourth series of Kin. |
| Nevertheless, the company remains confident in the medium-term outlook, supported by confirmed series commissions from RTÉ and the BBC, together with ongoing negotiations with Creative Wealth (purchaser of the IP from Kin Series Holding Ltd) and Fifth Season (the distributor of Kin). Once these matters are resolved, production of Series 3 and Series 4 is expected to resume in the first half of 2026, thereby improving the financial outlook for that year. |
| These challenges have contributed to a financial loss for the reporting period ending 2024. |
| In response, under the leadership of Christian Baute, Headline Pictures has continued to develop its existing slate and has strategically focused on optioning proven drama formats from Israel, which have recognised market value and serve as proof of concept in a more risk-averse commissioning environment. The company implemented a programme of reduced overheads during 2024, a course that will continue in 2025. The directors remain confident that the company will enter a recovery phase in 2025/26. |
| Headline Pictures continues to benefit from the financial support of its principal shareholder and has significantly reduced its costs relative to competitors. This backing, together with the company's strategic focus and the potential recommencement of additional series, provides a sound basis for the presentation of these financial statements on a going concern basis. |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2024 |
| 3. | EMPLOYEES AND DIRECTORS |
| The average number of employees during the year was |
| 4. | INTANGIBLE FIXED ASSETS |
| Computer |
| software |
| £ |
| COST |
| At 1 January 2024 |
| and 31 December 2024 |
| AMORTISATION |
| At 1 January 2024 |
| Amortisation for year |
| At 31 December 2024 |
| NET BOOK VALUE |
| At 31 December 2024 |
| At 31 December 2023 |
| 5. | TANGIBLE FIXED ASSETS |
| Computer |
| equipment |
| £ |
| COST |
| At 1 January 2024 |
| and 31 December 2024 |
| DEPRECIATION |
| At 1 January 2024 |
| Charge for year |
| At 31 December 2024 |
| NET BOOK VALUE |
| At 31 December 2024 |
| At 31 December 2023 |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2024 |
| 6. | FIXED ASSET INVESTMENTS |
| Shares in |
| group |
| undertakings |
| £ |
| COST |
| At 1 January 2024 |
| and 31 December 2024 |
| NET BOOK VALUE |
| At 31 December 2024 |
| At 31 December 2023 |
| The company's investments at the Balance Sheet date in the share capital of companies include the following: |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2024 |
| 6. | FIXED ASSET INVESTMENTS - continued |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| 7. | STOCKS |
| 2024 | 2023 |
| £ | £ |
| Development expenditure |
| 8. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Trade debtors |
| Amounts owed by group undertakings |
| Other debtors |
| Prepayments |
| 9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Trade creditors |
| Amounts owed to group undertakings |
| Social security and other taxes |
| VAT | 985 | - |
| Other creditors |
| Accrued expenses |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2024 |
| 10. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Amounts owed to group undertakings |
| Other creditors |
| 11. | SECURED DEBTS |
| The following secured debts are included within creditors: |
| 2024 | 2023 |
| £ | £ |
| Other loan | 400,000 | 400,000 |
| A loan from UGC Images SA is secured by a mortgage over all of the fixed and current assets of the company, owned now and in future, including the intellectual property and all fees, royalties and other rights deriving from the intellectual property. |
| 12. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
| The Report of the Auditors was qualified on the following basis: |
| Basis for qualified opinion |
| The accounts for the year ended 31 December 2024 recognise accrued income in relation to Kin Series 2 and Call My Agent totalling £161,116. Due to the ongoing administration process of the numerous of Bron's UK-based companies and the lack of signed Collection Agreement (and despite the existence of an executed Bron - Headline coproduction agreement that foresees and defines how this income is being calculated and also despite advanced drafting by Fintage of such Collection Agreements), there is uncertainty as to whether this income is receivable. Despite the Directors assurances that the income is overdue, the evidence at present does not necessarily support the assertion it will be received and the report is modified as a result. |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. |
| for and on behalf of |
| 13. | ULTIMATE CONTROLLING PARTY |
| The parent company is UGC Images SA, a company registered in France. The ultimate holding company is UGC SA, 24 Avenue Charles De Gaulle, 92200 Neuilly-Sur-Seine, France; a company registered in France. |